Skip to main content

COUNTER TRADE

Counter trade, a modern variant of the age old system of trade by barter, has emerged as a new feature of economic relationship. For a nation which is suffering from a drastic reduction in its foreign exchange earnings and trade arrears with Western export credit agencies, counter trade has the attraction of providing goods for the domestic market without draining the scarce foreign exchange. The low credit rating which the country has in the international capital market and the unwillingness of the government to adhere strictly to the international monetary fund's supervised adjustment programme also favour counter trade in the system.
    However, there are grounds for insisting that counter trade should be used with caution. Counter trade is a form of gambling. As with every other forms of trade by barter, one partner is inevitably going to be better off than the other in the end. This will be determined by what monetary value is assigned to the goods exchanged and how constant this remains within the duration of the transaction. For example, if the agreement is based upon the current price of oil, a subsequent price decrease will make Africa exchange more barrels of oil for the same value of goods, while an increase in price will yield the opposite effect.

Comments

Popular posts from this blog

READING AND UNDERSTANDING

All reading is geared to understanding. There would be no point in reading if we did not understand what we are reading. However there are many different obstacles in the way of easy understanding of a passage. It is your task as a reader to actively seek to break down the barriers to understanding.    One block to understanding is caused by references in the passage to things that are outside it. Pronoun are the first examples of words that refer to people and objects. Sometimes, it is easy to follow the reference at other times, it is more difficult. Look at the opening sentence of the passage you've just read that begins this way  "She was waiting for us:small, dowdy, dirty..."  Who was waiting? Who was the person waiting for? (Perhaps you would also like to know why she was waiting.)Answers to these questions will surely help you to understand and thus follow the reference. The first thing to do is to ask questions like the ones we have just asked and to read t...

Natural soil

 Natural soils are influenced by rainfall and temperature,heavy rain causes the soil to become leached. High temperatures increase the rate of decomposition of organic matter in the soil, thereby lowering its humus content. Thus, climatic conditions tend to produce poor soils in the tropics and rich soils in the temperate regions. Besides climate and vegetation, the parent rock material also contributes to the quality of the soil. For example volcanic rocks tend to produce fertile soils.    Laterite, a red soil which is a product of leaching, is commonly found in the tropics. It is composed mainly of iron and aluminium compounds,and poor in humus and essential plant nutrients, such as phosphorus, nitrogen and potassium. The black and brown soil of the temperate grasslands are the world's richest soils, with a high mineral and humus content. The light coloured desert soils tend to be very rich in minerals but have a low humus content.    Mainly the soils ar...

Frequent masturbation

Frequent masturbation in young men is linked to higher risk of early prostate cancer , but it lowers prostate cancer risk for men in their 50s, a study shows. High levels of male sex hormones, or androgens, may increase a man's risk of prostate cancer . But different studies of this question, done in different ways, have reached different conclusions. To look at the question in a new way, a team of researchers  looked at whether men with more intense sex drives were at higher risk of prostate cancer.  About half the men got prostate cancer by age 60, and about half did not have cancer . The findings were surprising. Sexual intercourse did not affect prostate cancer risk. But frequent masturbation did -- in different ways, at different times of life. "Frequent masturbation during men's 20s and 30s increased their risk of prostate cancer. For men in their 20s, "frequent masturbation" was two to seven times per week. Compared to same-age men who reported mas...